Saturday, 05 December 2015 04:34

Libertarian's Corner: Five Lessons I Learned from a Successful New York Entrepreneur

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Libertarian's Corner: Five Lessons I Learned from a Successful New York Entrepreneur

Joseph S. Fulda

Joseph Fulda is a freelance writer living in New York City. He is the author of Eight Steps Towards Libertarianism.

I met Joel before his shop even opened as he was preparing his entrance into the world of business while still in his twenties, and explained to him my penchant for fountain soda over reading and writing, which is what I do. I asked if he could extend the courtesy of a free refill for each soda, and he agreed. That was in 2004; now as 2011 has already begun, I realize how much one can learn from a successful businessman. It was William E. Simon who said in his landmark book, A Time for Truth (New York: Berkley Books, 1979, p. xiii,) that businessmen generally have far more open minds than do academics, because a single mistake can bankrupt them, whereas there are no such consequences for a wrong idea never implemented into practice - a point with which Joel has told me he is in agreement.

So, here are five lessons I have learned from someone younger and wiser than I am:

(1) Consumer preferences have truly little to do with logic. Early on, Joel and I had a conversation after he insisted that his employees clean the outer glass of the case in which his food is sold. I said, naively, "Isn't that the wrong standard? The inside glass must be kept clean; the outside glass is mere, and literal, window dressing." He chuckled and replied, "My customers are unlikely to see it that way!"

Joel also sells freshly baked cookies, and asks his employees to keep the cookie trays full. I queried him on that one, too. He told me that an almost empty tray suggests little interest. I replied that it could be seen the other way around, too, couldn't it? That the cookies simply are flying off the tray. Another chuckle, and the same reply as just above.

Sure, I know all about subjective values, irrational consumer preferences, and such, and have even written on the subject. But Joel doesn't merely know this; he groks it, to use Robert A. Heinlein's word.

(2) If at all possible, avoid the courts which are slow, laborious, and in which even winning is normally a pyrrhic victory. Early on, workmen fixing up his place owed him some money. He chose not to sue, nor even to enter into a dispute and demand his money back. Instead, he asked them to do some additional work to earn the money. They produced a lighting fixture right outside the store that beckons all comers in winter's early mornings, and at nighttime. Everyone ended up winning, especially the customers!

(3) Turnover is expensive; hire well and you'll hardly ever need to dismiss anyone. Joel now has four stores, which follow much the same practice. I personally know of only two outright dismissals, one for theft, one for serious and repeated lateness and other serious matters. Joel believes in second chances.

But I also know of something else that speaks even more highly of this businessman: No less than three employees who upped and left, only to come back. This speaks well of Joel in two different ways, first and obviously, that they wanted to come back, and second, and perhaps less obviously, that he wasn't beset by false pride and just took them back. Not-for-profit institutions and large, apparently successful corporations which are in reality in stasis and soon to undergo what Joseph Schumpeter called "creative destruction" have a lot to learn in this regard.

(4) Don't ever solicit anonymous feedback. This is a recipe for disaster for the most obvious reason: If you don't know who is giving you feedback, you are completely precluded from taking the feedback from whom it comes. As the reader has already no doubt figured out, Joel does hear out customers, although he often surprises them by how he uses what they tell him, but he avoids those radio-button forms, suggestion boxes, and the other nonsense that are so popular in some quarters - again, typically, not-for-profit organizations and large corporations that are in stasis.

(5) Flexibility is critical. Joel is very flexible. For a variety of reasons, it seemed to no longer make much sense for my soda habit to be precisely metered. So I approached Joel with a proposition: Could I pay a lump sum monthly amounting to what I had been paying, with a contract duly signed by us, for unlimited drinks? He said "Yes."

Joel, stand up and take a deep bow, for making it in New York and for making a new friend. *

Read 1475 times Last modified on Saturday, 05 December 2015 10:34
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